Tuesday, June 30, 2009

Joel Kotkin / Forbes:Did Homeowners Cause The Great Recession? -- Once considered sacrosanct by conservatives and social democrats alike, homeownership is increasingly seen as a form of economic derangement. The critics of the small owner include economists like Paul Krugman and Ed Glaeser, who identify the over-hot pursuit of homes as one critical cause for the recession. Others suggest it would be perhaps nobler to put money into something more consequential, like stocks.

Homeowners also get spanked by leading new urbanists, like Brookings scholar and urban real estate developer Chris Leinberger. He lays blame for the downturn not on unscrupulous financiers but squarely on aspiring suburban home buyers. "Sprawl," he intones, "is the root cause of the financial crisis." ...

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Bloomberg:Shiller Sees ‘Improvement’ in Rate of Home-Price Drop -- Home prices saw a “striking improvement in the rate of decline” in April and trading in funds launched today indicates investors believe the U.S. housing slump is nearing a bottom, said Yale University economist Robert Shiller.

“At this point, people are thinking the fall is over,” Shiller, co-founder of the home price index that bears his name, said in a Bloomberg Radio interview today. “The market is predicting the declines are over.” ...

“My guess would be that home prices are going to level off -- they’re not going to keep falling,” Shiller said in a separate interview with Bloomberg Television. Still, it’s “hard to predict” a speculative market, and “I am not optimistic that we’re going to see any sharp rebound.” ...

Calculated Risk: House Prices: The Long Tail -- With record delinquencies, record foreclosures, few move-up buyers (impacting the mid-to-high end), a huge overhang of inventory, I believe prices will continue to fall in many areas.

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Bespoke:Would You Buy This Stock? -- Would you buy a stock whose chart looks like the one below? It had a nice run but has pulled back quite a bit over the last couple of years.

The chart above is of the S&P/Case-Shiller 10-City Composite Median Home Price index...

Bloomberg:Delinquencies Double on Least-Risky Loans, U.S. Says--Delinquency rates on the least-risky mortgages more than doubled in the first quarter from a year earlier as U.S. efforts to help homeowners failed to keep pace with job losses that pushed more borrowers toward foreclosure.

Prime mortgages 60 days or more past due climbed to 2.9 percent of such loans through March 31 from 1.1 percent at the same point in 2008, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said today in a report...

Blown Mortgage:New Report Links Foreclosures and Homelessness -- The Foreclosure to Homelessness: The Forgotten Victims of the Foreclosure Crisis report released last week provides insight into how foreclosures have affected homeless populations around the country. Based on surveys completed by 178 organizations across the U.S. that provide services to individuals and families experiencing homelessness it was determined that the nation’s homeless population has been directly impacted by foreclosure and that the is likely to increase along with the number of foreclosures. Nearly 80 percent of the respondents reported that at least some of their clients became homeless due to foreclosure...

That’s the glum assessment of those in the adult entertainment industry, hundreds of whom gathered last week for the annual Cybernet Expo conference in San Francisco. The industry, now a multibillion-dollar online business, has discovered that people just aren’t willing to click-to-pay for vice the way they once did . . .

John Mauldin / Minyanville:No End in Sight for Recession -- I recently heard someone on CNBC talking about how the market was getting ready to rise, and that the recovery had started. (This was based on the fact that the S&P 500's 50-day moving average was rising above its 200-day moving average.) I listened to this babbling for another 2 minutes or so, then had to turn it off.

We keep hearing that the market is "telling us something" -- usually that the recession's going to end, and that the market looks out about 6 months. This is rubbish...

Only five months after Inauguration Day, the focus of Washington's economic and domestic policy is already shifting. This reflects the emergence of much larger budget deficits than anyone expected. Indeed, federal deficits may average a stunning $1 trillion annually over the next 10 years. This worsened outlook is stirring unease on Main Street and beginning to reorder priorities for President Barack Obama and the Democratic congressional leadership. By 2010, reducing the deficit will become their primary focus...